Correlation Between Saha Pathanapibul and AJ Plast

Can any of the company-specific risk be diversified away by investing in both Saha Pathanapibul and AJ Plast at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Saha Pathanapibul and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saha Pathanapibul Public and AJ Plast Public, you can compare the effects of market volatilities on Saha Pathanapibul and AJ Plast and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Saha Pathanapibul with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saha Pathanapibul and AJ Plast.

Diversification Opportunities for Saha Pathanapibul and AJ Plast

-0.03

Correlation Coefficient

Saha Pathanapibul  AJ Plast

Good diversification

The 3 months correlation between Saha and AJ Plast is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Saha Pathanapibul Public and AJ Plast Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Plast Public and Saha Pathanapibul is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Saha Pathanapibul Public are associated (or correlated) with AJ Plast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Plast Public has no effect on the direction of Saha Pathanapibul i.e., Saha Pathanapibul and AJ Plast go up and down completely randomly.

Pair Corralation between Saha Pathanapibul and AJ Plast

Assuming the 90 days trading horizon Saha Pathanapibul Public is expected to under-perform the AJ Plast. But the stock apears to be less risky and, when comparing its historical volatility, Saha Pathanapibul Public is 209.82 times less risky than AJ Plast. The stock trades about -0.04 of its potential returns per unit of risk. The AJ Plast Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  535.00  in AJ Plast Public on September 2, 2024 and sell it today you would lose (55.00) from holding AJ Plast Public or give up 10.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Saha Pathanapibul Public  vs.  AJ Plast Public

Saha Pathanapibul Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saha Pathanapibul Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Saha Pathanapibul is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

AJ Plast Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AJ Plast Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, AJ Plast disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saha Pathanapibul and AJ Plast

The main advantage of trading using opposite Saha Pathanapibul and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saha Pathanapibul position performs unexpectedly, AJ Plast can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AJ Plast will offset losses from the drop in AJ Plast's long position.

The idea behind Saha Pathanapibul Public and AJ Plast Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.